Judge Approves Dewey Partner Settlement, Slaps Down Objectors

Bankruptcy proceedings are speeding right along for failed law firm Dewey & LeBoeuf LLP (notwithstanding an ongoing criminal probe into whether firm managers purposely misled banks and some ex-partners).

On Tuesday federal judge Martin Glenn approved a $71.5 million settlement between more than 400 former Dewey partners and the firm’s estate. The agreement represents the biggest single recovery to date for the firm’s creditors, which are owed between $315 and $560 million in the largest law firm collapse in U.S. history.

As WSJ reported, such a swift resolution of “clawback” claims could set a new pattern for future law firm liquidations. Typically efforts to recover money paid out to partners as a law firm headed into bankruptcy can take years of costly litigation.

Those on board with the plan (lenders, most creditors and Dewey’s bankruptcy advisers) were pleased by the decision. Less delighted were the ex-partner groups which say the firm owes them millions in lost pension payments and which opposed the settlement.

Those groups said the proposed settlement shielded Dewey insiders and represented a lowball recovery. They wanted Judge Glenn to appoint an independent examiner to the case. . .

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